I disagree. Cutting all the useless corporate subsidies and pork would allow us to simplify tax filing and the tax code all in one fell swoop. Then we could automate a huge chunk of the IRS and reallocate their employees to other agencies that will serve the tax payers better. It's a win for everyone except corrupt politicians and their corporate masters.
It's completely unrelated. The tax code can be as complex or simple as desired for any number of other reasons. The government already knows the vast, vast majority of information required to determine what's owed, and we know that because they catch you when you screw it up. Obviously we can have processes for appeals or amendments to an individual's return.
Nevertheless, do absolutely agree with getting rid of corporate subsidies and pork, and simplifying the tax code, if for no other reason than to close the innumerable number of loopholes abused by corporate entities and the wealthy.
A simple tax code is a simple one for a computer to calculate.
1. Input the taxpayers's income from all taxable sources.
2. Lookup what tax bracket you're in based on that income.
3. Calculate the appropriate tax bill based on that percentage.
4. Subtract that from whatever has already been taxed out of their payroll for the year.
5. Bill them or refund them appropriately.
No humans would need to be part of the process if it were that simple, saving money and making errors less likely. Also, the simpler the tax code is the less computing hours it will require to complete the entire country's taxes, meaning faster refunds and less energy usage. Simpler taxes are even better for the environment!
A simple tax code is to eliminate the federal personal income tax. No federal personal income tax would eliminate W-2 paycheck wiithholding, giving every W-2 employee an effective take home pay increase.
People not filing personal federal income tax is green.
Banks not sending people yearly interest statement is green.
Companies not withholding personal federal income tax from paychecks uses less CPU and fewer papers so it is green.
Keep or tweak corporate taxes and fees as deemed necessary. And each State can do whatever.
It sounds so simple when some random guy on the internet says it! The professionals who have worked on this for decades clearly have no idea what they're doing!
1) People have lots of taxable sources, and many of them aren't digitized. This is especially true for people whose primary source of income is not W2 employment.
2) Computers can figure out the inner workings of stars, the alignment of molecules in proteins, and all sorts of other things that requires massive amounts of computing. If you're going to use a computer to calculate taxes, you don't need a simple tax code. Indeed, the tax code should be as complicated as possible to efficiently and fairly calculate taxes for each individual and corporation. But on that note, the calculation of income taxes is relatively straightforward. (The IRS is able to verify the calculations of the tens of millions of returns that are filed digitally within minutes.) The issue is, and has always been, data entry.
3) See #2.
4) Ignores all the other types of tax payments made during the year...
5) This is literally how it already works once you send in your tax return.
No, it is "excessively" complex because it recognizes that what is fair to one industry or group of individuals isn't necessarily fair to a different group of individuals. What many people think of as "loopholes" are grounded in decades or centuries or pre-income tax financial structures, especially the loopholes related to agriculture.
For example, one of the biggest loopholes in the tax code is the carried interest exception. It created modern Silicon Valley; YCombinator exists solely because of this loophole. Most of the nation regards it as the most blatant subsidy in the tax code, but it is essential to startup financing. How would you feel if they got rid of it?
And the "flat rate" tax rate you propose is a huge subsidy to the wealthy, who derive the most benefit from a stable government and therefore should pay the most to continue it. Conversely, any rate high enough to fairly tax the wealthy would excessively tax the poor and middle-class. This is why we have a progressiv (i.e., complicated) rate structure.
> For example, one of the biggest loopholes in the tax code is the carried interest exception. It created modern Silicon Valley; YCombinator exists solely because of this loophole. Most of the nation regards it as the most blatant subsidy in the tax code, but it is essential to startup financing. How would you feel if they got rid of it?
Aside from the fact that we might lose HN? I'm completely for that. Most startups are just re-imaginings of existing businesses but worse. Silicon Valley gave us the gig economy and commercial-surveillance-as-business, and has flattened the Internet into like 6 websites all of which copy-cat the hell out of one another to the detriment of all the features that made each of them notable in the first place.
And you know, crazy thought here, but if I don't make enough money to offset my living expenses, I go broke and go into bankruptcy and lose everything I have. Maybe if a business can't exist without ludicrous subsidies and serves no purpose outside of that, maybe we don't need it?
I figured a group trying to eliminate pork would be a good measure.
Remember that the vast majority of pork isn't actually pork but carve outs.
I don't have specifics but take the infrastructure bill. You could have language setting aside $X million for a particular type of work. Then to get people on board you slice up that money to ensure certain areas get that money.
This doesn't impact the overall spend directly and is very much the kind of thing the bill should be doing so is harder to call pork.
And to be clear you couldn't count that money as all pork, you would need to adjust based on how much the original place would have gotten anyway. (Sometimes the allotment is just for show to give someone something to brag about at home)
